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2026 Irish Severance Tax Engine

Redundancy Tax Calculator Ireland

Calculate your statutory redundancy entitlement and find out how much of your ex-gratia severance package is sheltered from tax. Compares Basic, Increased Exemption, and SCSB with 0% PRSI.

2026 rates verified

Redundancy & Severance Details

Min 2 yrs for statutory
years
months

Statutory redundancy awards 2 weeks per year pro-rata for partial years.

€

Statutory redundancy caps weekly wage at €600/week (€31,200/yr).

Voluntary extra severance
€
€

Used for Standard Capital Superannuation Benefit (SCSB) formula.

€

Reduces the Increased Exemption & SCSB euro-for-euro. Enter 0 if not taking or deferring.

Exemption Claimed in Previous 10 Years?Increased Exemption can only be claimed once every 10 years
Estimated Marginal Income Tax Rate
100% Revenue.ie & WRC Compliant

Total Net Take-Home Severance

What lands directly in your bank account after all statutory exemptions

Net Payout to Bank
€52,600
You retain 100.0% of your total gross severance package
Total Gross Package
€52,600
Statutory (€12,600) + Ex-Gratia (€40,000)
Total Tax-Free Portion
€52,600
Exempt from Income Tax, USC & PRSI
Total Tax & USC Deducted:€0(0.0% effective rate)
PRSI Charged:€0 (100% Exempt)Section 13 SWCA statutory exemption
Winning Relief Applied:SCSB (Standard Capital Superannuation Benefit)€43,333 sheltered
Layer 1: Legal Entitlement

Statutory Redundancy

Eligible (2+ Yrs)

Under the Redundancy Payments Acts, employees aged 16+ with at least 104 weeks continuous service are entitled to statutory redundancy.

Statutory Weeks Formula:21 weeks (2 wks/yr + 1 bonus)
Statutory Weekly Cap:€600.00 / week
Effective Weekly Rate Used:€600 / week
Statutory Amount (100% Tax-Free):€12,600
Zero Deductions: Statutory redundancy is completely exempt from Income Tax, USC, and PRSI by law. It does not affect your tax bands or credits.
Layer 2: The 3 Revenue Exemptions

Ex-Gratia Exemption Comparison

Best Wins

Revenue permits you to shelter your ex-gratia payment using whichever of the three statutory methods produces the largest tax-free exemption:

1. Basic Exemption
€10,160 + (€765 × 10 years)
€17,810
2. Increased Exemption
Basic + €10k bonus
€27,810
3. SCSB FormulaBEST
(Avg 3-yr pay × years ÷ 15)
€43,333
Gross Ex-Gratia Offer:€40,000
Tax-Free Sheltered Exemption:−€40,000
Taxable Portion Subject to PAYE:€0
Income Tax (40%):−€0
USC (~8% marginal):−€0
PRSI (0% Statutory Exemption):€0.00
Net Ex-Gratia Take-Home:€40,000

How to Avoid Overtaxation & Maximize Your Severance

1. Employer Pension AVC Sacrifice

If a substantial portion of your ex-gratia package is taxable, ask your employer if you can divert the taxable excess directly into your occupational pension as an employer contribution before termination. Employer contributions do not trigger BIK and are 100% tax-sheltered.

2. Overpaid Tax Claim on myAccount

Employers often deduct tax on ex-gratia payments under emergency tax or without applying the best SCSB relief. At the end of the tax year, request a Statement of Liability via Revenue myAccount to claim any overpaid tax back directly to your bank account within 3–5 working days.

3. Contractual Notice Pay Warning

Revenue strictly excludes payments in lieu of notice (PILON) and accrued holiday pay from termination exemptions. Contractual earnings are always taxed in full as normal PAYE pay with PRSI, Income Tax, and USC applied.

Regulatory & Statutory AccuracyTax Year 2026 Verified
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Revenue.ie Statutory Rates

Calculations strictly align with the Finance Act 2025/2026 and official rate schedules published by the Irish Revenue Commissioners.

Chartered Accountant Reviewed

Formulas designed and verified by a qualified Chartered Accountant (ACA) for Redundancy & Severance Tax Calculator.

100% Client-Side Privacy

Calculated entirely in your device memory. Zero salaries, income data, or personal details are transmitted or stored on any server.

Disclaimer: This calculator provides estimates only and does not constitute professional tax advice. Figures are based on Revenue.ie guidelines for tax year 2026. Individual circumstances vary — always consult a qualified tax advisor for advice specific to your situation.

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